5 September 2018 – Analysis by the Business & Human Rights Resource Centre (the Resource Centre) today reveals that just 5 out of 59 major solar, bioenergy and geothermal companies meet four basic criteria to protect communities and workers in their projects. Almost half appear to have no basic protections in place. This echoes previous analysis on the wind and hydropower sectors.
A fast and fair transition away from fossil fuels and towards increased use of renewable energy is critical to mitigating the effects of climate change. However, this can only be achieved if renewable energy companies are able to rapidly deploy projects in a way that respects the rights of communities and workers. Ahead of the Global Climate Action Summit in San Francisco next week, this new research shows that only a handful of renewable energy companies are ready to do so. The majority fail the minimum tests on human rights. This can result in project delays, legal procedures and costs for renewable energy companies, and risk investors’ capital.
The Resource Centre surveyed 59 companies and assessed their commitments on human rights, community consultation, labour rights, grievance mechanisms, and supply chain monitoring. Allegations of abuse were also taken into account. The briefing identifies a handful companies that demonstrate leadership through their policies and community consultation practices, including Scatec Solar (Norway), W Dusk Group (Canada), SunPower (USA) and Contact Energy (New Zealand).
The findings come at a time when allegations against renewable energy companies are increasing. Since 2010, the Resource Centre has approached companies 112 times on human rights concerns related to renewable energy projects. Allegations have included killings and violence against human rights defenders, displacement of local communities without adequate consultation or compensation, harms to the rights of indigenous peoples, and abuse of workers’ rights. The Resource Centre also tracks attacks on human rights defenders and the renewables sector is among the sectors most frequently linked to attacks, along with mining and agribusiness.
“Just five of 59 companies are taking adequate steps to respect human rights and responsible investment in their renewable energy projects, while the vast majority appear complacent. These companies risk damaging the lives and livelihoods of local communities and workers. They also risk the success of their renewable energy projects and the capital of their investors. Our transition to a low carbon economy must be both fast and fair. If the majority of the industry doesn’t emulate the few leaders we identified and improve quickly, it will deliver neither”, said Phil Bloomer, Executive Director of Business & Human Rights Resource Centre.
Some of the companies with the most detailed human rights commitments have also had serious human rights allegations raised against them, suggesting a possible disconnect between policies and practice on the ground. Some of these allegations rose to the level of international legal claims, such as a lawsuit against the International Finance Corporation over aiding gross human rights abuses, including killings, due to its investment in Dinant Corporation, a bioenergy company in Honduras.
The briefing highlights that the majority of companies in the biggest renewable energy markets are falling behind on human rights commitments. Even though China hosts 45% of new global investments in renewable energy, only one out of five Chinese solar companies included in this research has a public commitment to human rights. Similarly, only one out of four Indian companies has a public human rights commitment in place. Commitments by their US and European counterparts are uneven, but more have adopted policies: 9 out of 17 European companies and 4 out of 6 US companies analysed have public human rights commitments.
As investment ramps up and also moves to countries with weaker human rights protections, companies need to step up their responsibility to respect human rights as set out by the UN Guiding Principles on Business and Human Rights. Equally, investors and governments must provide the right environment for them to do so including through incentives, monitoring, and regulation.
“Worryingly, figures from Business & Human Rights Resource Centre show that just because climate action is good for the planet does not mean it is always good for people. Whilst not questioning the need for a rapid transition, business and investors should take heed to such cases highlighted in this report from both a moral standpoint but also from a business standpoint, as such cases undermine a license to operate and cause costly delays. As opportunities arise in this transition to sustainable development, it is imperative that investors and businesses protect human rights in their investments, operations and supply”, said Mary Robinson, former President of Ireland and President Mary Robinson Foundation – Climate Justice.
The financial costs of weak human rights practices are starting to emerge from the renewable energy sector, as exemplified by the Sh31 billion (US $308) million lawsuit filed at the International Court of Arbitration by project developers seeking damages following the cancellation of Kinangop Wind Park in Kenya due to community opposition. The developers lost the suit, and their investment.
The handful of leading companies identified in this briefing show that it is possible for renewable energy companies to embrace human rights practices at the core of their business. Adopting these practices bring companies a step closer to protect communities and workers from abuse, and investors from heavy losses.